Business Essays - Hospitality Services Industry

Hospitality Services Industry

Question: - Critically analyse the importance of service in global tourism and hospitality environments.

What is service?

According to Wilson, Zeithamel, Bitner, Gremler (2008) services are deeds, processes and performance. In other view services have been described as a “deed, act or performance” (Berry, 1980) or as “encounter in time, rather than physical objects” (Brunell, Kelley, & Ramesan, 1992). Today most of people working in the service industry (e.g. lawyers, charted accountants, teachers and doctors) which account for more than three fourths (75%) of the total workforce in all developed countries and their share is rapidly increasing.

The hospitality industry is also part of service industry, which is rapidly growing. Proof? Right now hospitality is one of the fastest growing industries in the world. In many respect hospitality industry is very closely associated with the tourism industry. As we can see that when there is growth in tourism in almost all circumstances there is also growth in hospitality industry and which resulting in its development as global industry. (Kandampully, 2002 (pp. 5-8) and Shoemaker and Shaw, 2008 (p. 32)) a paragraph break here would be good Hospitality is comprised of three main elements which are accommodation, food and beverages and entertainment.

These three elements of hospitality are sometimes offer individually such as motel providing only accommodation, restaurant providing only food and beverages, theatre providing only entertainment and more commonly, some business organisations might offers various type of combination providing these three elements such as hotel offering accommodation, food and beverages along with entertainment. These elements that a firm offers are determine with type of clientele which to be attract. (Kandampully, 2002 p.14)

How the services are different from goods? This section tells me about what services are, but does not add to your analysis of the importance of service.

Most important differences between services and goods are intangibility, perishability, heterogeneity, and inseparability of production and consumption. (Kandampully, 2002 p. 31). What is Intangibility? We know that services cannot be seen, touch, smell, taste and hear therefore they are intangible in nature. Service are only experienced rather than possessed. For example we use the services of taxi by travelling one place to another but it does not mean that we are purchasing any product but we are using its services.

Sometime there is combination of both tangible and intangible elements. Such as in restaurant, they provide the acquisitions of supplies, the preparation of meals and the serving of those meals. And tangible elements such as decor, building, kitchen equipment, the food items remain behind the intangible but obviously necessary for the service. (Shoemaker, Shaw 2008). Another distinct character of service is perishability which is closely related to the intangibility. For understanding perishability we have to consider the hotel room or any airline seat or any seat in restaurant: if a seat is not sold on a particular flight or a room is not sold on a particular night or seat in restaurant is not booked then opportunity to sell is gone forever.

Rooms of hotel and seat of any flight is very perishable in nature so it cannot be stored for long time. So services cannot be saved, stored, resold, and return. (Kandampully, 2002 p. 39). Service Industry is people based industry so services are not always similar like goods. So we can say that services are heterogeneity in nature. Services are differs from one service organisation to another, one service performer to another, same performer on different situations.

For instance in hotel, guest contact with many employee of hotel in a day, and employee of hotels meets dozens of guest in hotel. So they behave differently according to situations. Jan Carlzon, formerly CEO of the Scandinavian SAS, called each of these employee and customer a “moment of truth.” Consistency of service is very important but it is very difficult to maintain because services are interactive in nature. The services are totally depend on employees and employees are not machine they are only human being. (Shoemaker, Shaw 2008 p.37)

Moment of Truth: is a critical interaction between the customer and the product or service or employee that determines whether the customer will continue to purchase from the vendor.

(http://www.mcgarahan.com/images/S17/Documents/Contact%20Center%20Glossary%20of%20Terms.htm). Ninemeier and Perdue (2005, pp. 24- 25) stated that every hospitality organisations has “thousand of moments of truth every day” which include taking order from guest in restaurant, booking of hotel room, asking guest preferences, preparing of drink which requested by guest and many more. So with help of moment of truth there may be advertisement to which Ninemeier and Perdue called “Word of mouth advertisement”.

Word of mouth is best way of advertisement because it does not cost to us, it occurs when previous guest tell other person about his experience at hospitality organisation. So this advertises our organisation, but sometime guest have bad impression so they also tell bad impressions to the guest. So word of mouth may be favourable or unfavourable for the organisation but it is totally depend on our services.

Services have one more distinctive character which is different than goods that is Inseparability. When services are purchased they are consumed immediately. Services consumed in the same place and in the same time where it is produced. For instance guest orders the coffee, service employee prepare coffee for guest so service is produce and when he serves guest than service is consumed. (Shoemaker, Shaw 2008 p.39)

Why Ritz-Carlton Hotel is the best? Their motto is “we are Ladies and Gentlemen serving Ladies and Gentlemen”. What it mean? Ladies and Gentlemen are their human resources. Ladies and Gentlemen are the most important to services commitment toward guests. By this they are giving respect to the employee and in turn employee providing services with their full effort, honesty, integrity, respect and commitment. (Ninemeier, perdue 2005 p.25-26)

How is a Guest Satisfied? This is very important question for hospitality organisation. Hospitality organisation have main objective to satisfy the guest so how they satisfy the guest. Reynolds (2004, p. 24) stated that first of all guest can be satisfied through Quality service and Consistent service. Quality is measure of the extent to which a thing or experience meets a need, solves a problem, or adds value for someone. Now how quality services can be provided. Quality service is service that meets or exceeds guest desires or expectations. Guest expectation always change according to situation such guest at fast food outlet requires good quality food with quick service on the other hand guest at fancy restaurant require a good food with personalised service.

Secondly guest can be satisfied through consistent service. Today hospitality industry is very competitive industry so consistent quality service is very essential for growth in market. Consistent quality service is providing the same good quality service to guest each and every time they come to our business. It is very essential for every business. Good example of consistent service is Subway which providing same sandwich in the every part of world. Subway’s restaurant major goal is to maintain consistency in quality service.

Today hospitality industry is one of the most competitive industries so they need some structured system to remain in market for providing better services than their competitors. So how we can improve our services? Answer is Total Quality Management which is a structured system for satisfying internal and external Customers and suppliers by integrating the business environment, continuous improvement and breakthroughs with development, improvement, and maintenance cycles while changing organisational culture.

In very simple word TQM is art of managing the whole to achieve excellence. Main objective of TQM is to provide the quality product and services to satisfy the customers and continuous improvement in processes, systems, products, people, supplier, partner and services. We can improve our services through training the human resources, adopting new techniques, new systems and procedures. TQM represents an ongoing, continuous commitment to improvement. (http://www.docquality.info/en/?f=19&d=18832&n=quality+Total+Quality+Management.PPT&)

Six sigma is one of proven methodology across industry whether it is manufacturing, plastic, rubber, textile, or service. It is originated at Motorola in 1980’s and its implementation helped the company to win the 1988 Malcolm Baldrige National Quality Award. With the help of Six Sigma many companies are saving billions of dollars. Lucas stated that “six sigma is methodology for disciplined quality improvement “.

Similarly to Total Quality Management Six Sigma is also focus on the quality improvement. In fact the TQM is sum of Six Sigma and existing business system. [TQM = Six sigma + existing business system]. Juran's (1964) statement that "all quality improvement occurs on a project-by-project basis and in no other way" can be considered as base of Six sigma. Six Sigma is one of best tool for improving the quality services of business.

Why companies like Marriott Hotels, Disney, and IBM are so good in services? How they make their services at number one priority? Reason behind their success is Service Triangle. Service triangle is consists of strategy, system, people. Strategy means clear cut formula for delivering best services to customers. System is the way of developing resources for delivering services to customers and in last most important part is people who creates a service culture make the customer satisfied.

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Service Marketing Mix has been suggested by Wilson et al. (2008) that there are four Ps: product, price, place and promotion. These four Ps are main core of marketing. Services are produce and consumed simultaneously and guest are often standing at production place of services. Services are also intangible so guest always tries to look at tangible product of organisation to understand the nature of services organisation provides to them.

For example decor and design of coffee shop and appearance and attitude of stewards will influence customer experiences. Now there are new three Ps element of marketing mix that is people, physical evidence, and process. People are actors who play a role delivering the services to guest. Physical evidence is environment in which service is delivered. Process is way of delivering the services to the guest.

.3 Servuction System Model is used to illustrate that which influences hospitality service experience, including those invisible and visible to the customers. Invisible component is consists of invisible organisations and system. Such as invisible part is mainly a back of house of organisation such as system, equipments, technology, backroom procedures, etc which are needed to produce services. And on the other hand visible part is broken into three main parts that are inanimate environment, contact personnel/ service providers, and other consumers.

Inanimate environment is consists of physical design which are non living things present at the time of service such as tables, lighting, colour schemes, etc . Service provider is core person who is directly contacting guest at the time of service such as waiter, dentist, lawyer, etc. Other customers are two customers: customer A and customer B. Customer A is recipient of bundle of benefits created by service experience and Customer B is other customers who are part of Customer A. Servuction System Model demonstrate that customers are the integral part of service process and participation is always there but may be active or passive. Interactive nature of services and customer involvement in production process must be understood by managers. (Wilson et al. (2008) p20-23)

Finally, Hospitality industry is service industry which changes time to time so it always demands some innovation and improvement whether it may be in form of new technology, new service pattern, etc. Modern models like Six sigma, TQM, triangle of service always help hospitality and tourism industry for global growth.

Service industry always demands quality service and consistent services so for that we have to focus on the customer demands and needs. Service is intangible in nature but plays more important role than tangible. For development in global tourism and hospitality environment we have to keep our self updated according to market and keeping best services with continuous improvement.